We've all been there. Splurged on something we shouldn't have with money we couldn't afford to spend, bought a stock high, and then, sold it low. So, why can't we control ourselves?

We'll get to that with our panel in a moment, but first, a look at the complicated relationship between what goes on in here when it comes to this.

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UNIDENTIFIED MALE: It's Mega Millions.

ROMANS (voice-over): The odds of you standing there with the big check are just north of zero. So, why do we buy a ticket?

UNIDENTIFIED FEMALE: Are you ready?

ROMANS: Scott Huettel is part of Duke University's neuroeconomics team exploring, among other things, why smart people make foolish decisions with their money.

SCOTT HUETTEL, DIRECTOR, CENTER FOR NEUROECONOMIC STUDIES, DUKE UNIVERSITY: People don't buy a lottery ticket just because they have a chance of winning. They'll buy a lottery ticket because, over the next couple of days, it allows them to fantasize about what they would do if they won the lottery. And the sense they're paying for that experience, rather than for the chance at lottery, itself.

ROMANS: And it's not just the lottery. Jason Zweig, author of "Your Money and Your Brain" knows firsthand. He put his brain to the test with Scott's team at duke.

JASON ZWEIG, AUTHOR, "YOUR MONEY AND YOUR BRAIN": It's a combination of neuroscience and economics, basically, using the tools of scanning and other measurement technology that neuroscientists have used for years to study how the human brain evaluates risk and reward over time, which is what investing is all about.

ROMANS: From investing to buying a home, to why and how often we go on a spending spree, what researchers are learning is that when it comes to money, our brains are in some ways stuck in the Stone Age.

ZWEIG: In modern life, if you lose your money, you've -- you may well have lost a lot more than -- it's not just pieces of paper, you know, printed by a government somewhere. It's really, it's the key to maintaining your lifestyle. It's safety. And, you know, a million years ago, it would be the equivalent of losing your cave or losing your spear. Those are things that --

ROMANS: Or your dry wood.

ZWEIG: Or your dry wood. Money is what stands between most of us and a completely different life, which is a much more dangerous life. I mean, one of the things we've learned in the past three years is that the loss of money in a society can have just disastrous consequences for millions of people which a lot of Americans have forgotten. And so, it makes perfect sense that the modern human brain would react to the loss of money the same way it reacts to the presence of a poisonous snake.

ROMANS: The brain is a big place neurologically speaking. Where exactly do the alarms go off? We asked CNN's chief medical correspondent and practicing neurosurgeon, Dr. Sanjay Gupta.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Now, the region of the brain we're talking about is something known as infla (ph). Let me show you over here.

This is a part of the brain that's largely responsible for negative emotion, like disgust, pain, the sensation that you get when something is not quite right, that somehow danger is lurking in here.

Now, some recent studies have shown that the fear of losing everything, in this case, your money, your livelihood, could tap into that system and give you a real sense of fear.

ROMANS: But are all brains created equal when it comes to finances and risk taking?

HUETTEL: There's very strong evidence that there is no such thing as a single risk seeking person. That is, someone who is risk seeking, for example, interpersonally, they like adrenaline sports like sky diving, that same person might be conservative in their investments.

ROMANS: Through functional MRIs, hormone and genetic sampling, eye tracking and gaming simulations, neuroeconomic research is shedding light on this tug of war between the physiology and psychology inside our brains. When it comes to money and financial behavior, we're all still evolving, still battling our inner caveman.

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ROMANS: No caveman here. Jason Zweig is the author of "Your Money and Your Brain."

Jason, has the world become too complex with its credit default swaps and its complicated adjustable-rate mortgages for the way our brain perceives risk and reward in terms of money?

ZWEIG: Yes, I think, it may well have, Christine. And, I think, one thing that's very important for consumers and investors to bear in mind as they confront a world in which financial news is coming at us 24 hours a day, seven days a week, nonstop, is the key question really is, do I need to react to this?

Because your natural instinct is to react to everything, to freak out about just about everything, because your brain is a reactive mechanism, and that's one of the protective aspects of the human brain is it's built to respond. And one of the keys, I think, to financial success in a complicated information overload world is to ask yourself, do I need to react. And the answer more often than not will be no.

ROMANS: Well, there's this joke on Wall Street, Sanjay, don't just do something, stand there, because we'd like to think we make logical decisions, but sometimes, we don't.

GUPTA: And it's funny if you sort of like look at, you know, the way the brain works sort of building on what you're saying, the brain is reactionary, but it is pretty much designed, as you say, in the Stone Age in terms of pattern recognition. I mean, you recognize patterns. You start to formulate simple decisions based on those patterns, and ultimately, those simple decisions can be more complicated decisions.

What I find is interesting, though, is that as was said in the piece. It's very hard to pinpoint a personality and say this is a risk, you know, taking personality or risk adverse personality, because each situation comes differently to a person based on their memories, based on their emotion. That sky diver, as was mentioned, could be very risk averse when it comes to their money because the way their hippocampus, your memory works and their emotions sort of lairing into it.

ROMANS: That's on the quiz later, folks, hippocampus. But you know what's interesting, Sanjay, because it's the same brain that can be derailed by adjustable rate mortgage or by complicated credit default swap that invented the iPad, the complicated mortgage and credit default swap, too. So, the brain is so mysterious.

GUPTA: And there's not as much novel thinking, and this is hard for me to say as a neurosurgeon, not as much novel thinking as we'd like to believe in the brain. Again, I think it does come back to a lot of these patterns that people are sort of building on. So, you know, while they do these complicated financial transactions or dumb ones depending on what happens and also, you know, invent these incredible new technologies, a lot of us just simply building on existing knowledge, and it goes back to that pattern recognition again.

ROMANS: Doug Hirschhorn is an investment psychology adviser. He trains traders at top financial institutions, always good to know the brain and all of that. It seems our emotional side hijacks rational thinking. Give us an example of where this happen. DOUG HIRSCHHORN, INVESTMENT PSYCHOLOGY ADVISER: It's a very common thing because people want to go for the simple stuff, and then trading in a world where it's volatile and you got to make quick decisions. They go for this information. A great example I give to traders is that the market doesn't know if you're up or down money. So, don't make your trade and decisions based on information.

We personalize things and then try to make a decision based on what our current status is. So, I give you a credit (ph) what I think about it. If I told you you had a 95 percent chance to win in a game --

ROMANS: Sure.

HIRSCHHORN: Would you play that game?

ROMANS: I would.

HIRSCHHORN: Most people will say, yes they would. And some successful traders will say that's great. Let's play the game. Every time you win, I'll give you a penny, and every time you lose, you give me $1,000.

ROMANS: OK. Now, that's a problem.

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HIRSCHHORN: Now, that's exactly the point. You get caught up in the percentages. You get caught up in "I like to win." It's an ego fulfillment as opposed to looking at the data of what's the odds of me being right and then how much I make if I'm right or wrong.

ROMANS: Where the brain is pushing us. The way the brain is is pushing to go for the win.

HIRSCHHORN: Yes.

ROMANS: All right. Gentlemen, leave it there. We know the forces at play in our minds. Next, how do we take that knowledge and make better decisions about our money in all aspects of our life?

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ROMANS: When it comes to investing, we know we're supposed to be rational and objective, but often, our behavior is anything but that as we saw last May.

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ROMANS (voice-over): Panic selling. The flash crash of May 6th, 2010. The Dow plunges nearly 10 percent in less than 30 minutes. The panic leading to a suspension of logic.

Rationally, it was clear that something was amiss, something was going on. ZWEIG: The human brain really does not like surprise. The reason the flash crash was so devastating is because it was so inexplicable. It caught people completely by surprise.

UNIDENTIFIED FEMALE: If you choose to gamble, you have a 50/50 shot of keeping all 40 or losing all so you receive zero.

ROMANS: It's this type of risk and reward scenario that neuroscientists like Scott Huettel and the team at Duke University hope to better understand by conducting experiments with real money.

ROMANS (on-camera): This is called a functional MRI, and what does it have to do with how we save our money, how we spend our money, how we risk our money? Everything, because it shows what's happening right up here.

ROMANS (voice-over): In the MRI, volunteers are presented with different choices. Keep a small amount or risk it to win more. By changing the dollar amounts at risk and the dollar amounts that can be gained, scientists are able to see how different areas of the brain react as decisions are made.

HUETTEL: There's an area that we're very interested. It's called dorsal medial prefrontal cortex. That's the fancy way of saying the area is in the middle, top, and front of your brain, and that part of the brain seems to act as almost like a switch in a train yard or it's telling all the other parts of the brain that might contribute to a decision, which ones are going to be active at any moment in time.

And so, what it does is it seems to switch between the more risk averse and a risk-seeking mode depending on what's going on in the task at any moment in time.

ROMANS (on-camera): So, imaging technology can tell you a lot about what your brain is doing, how you're thinking and feeling about spending your money. That's pretty high tech. There's also a pretty low tech way. When a person goes into the MRI, they're giving you a saliva sample, and the saliva is going into something like this.

ROMANS: What do they find? What do you find in the simple tube? What does it tell you about what somebody's brain is thinking or doing about money or risk?

STANTON: So, the way that we use this is we take individual saliva samples, and through a test that's been available for the last 40 years, we can measure things like aspects of their DNA. We can measure hormones like testosterone or the stress hormone cortisol, and so through the MRI, we can look at interactions between your physiology, so something like testosterone or cortisol and your brain activity when you're processing some of the gambles that we have people do in the scanner.

ROMANS: So, it's not just the picture of the brain. It's the picture of the brain you're taking and what you're finding in the saliva, the hormones, and other things, they're taking an entire picture of what somebody is doing financially with the risk and reward.

STANTON: That's right. Because, really, the thing that we're growing to understand in these interdisciplinary fields, something like neuroeconomics where you're combing the field of neuroscience and behavioral economics, is that our decisions are influenced at multiple levels. So, we can try to study behavior by itself. We can try to study the brain by itself, but the more you account for all aspects of both behavior and physiology and neuroscience, I think that that's going to continue to let us, you know, more completely understand our behavior.

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ROMANS: It's really interesting stuff. Jason, given what we know about hormones, brain makeup, and motions, what's the number one mistake that investors make? Because, you know what, we buy high and sell low. We do it all the time.

ZWEIG: It's performance chasing, Christine. It's investing as if you were driving a car only by looking through the rearview mirror. You know, people, the more a stock goes up, the more people want to buy it. Even though none of us would buy stocks the way we'd buy socks, right?

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ZWEIG: I mean, if Wal-Mart raised the price of socks 50 percent, you wouldn't say, oh, I want to buy more socks. You'd say, I'll wait until the price comes back down, but when it stocks instead of socks, people love it.

ROMANS: So, help me beat my brain. Help me not do that. Help all of us, what can we do to try to, let's say, override that wiring? I know it's not exactly a good metaphor, but how do we do it?

ZWEIG: Well, what you need is policies and procedures. You have to have a plan in place and you have to live by the plan, so you can write what's called an investment policy statement that allocates your money across different assets and sets conditions under which you will trade or you won't trade. And you can have a simple rule that says, I will never buy an investment purely because it's gone up in price. I have to have at least three reasons that have nothing to do with recent price change.

ROMANS: All right. Jason, Zweig very good advice, and you wrote the book on this stuff.

ZWEIG: Thanks, Christine.

ROMANS: All right. Stick around, everybody. Next, who are the biggest risk takers and why? Is it all about nature versus nurture?

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ROMANS: Typically gamble and he got that. I mean, I would have taken the other one for sure.

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ROMANS: Yes. That kid was riskier than I am. That took place in Elizabeth Brannon's laboratory at Duke University where they found, perhaps not surprisingly, the kids are more risk prone, and people become more risk averse as they get older. Interestingly, the brain scans of kids that are less willing to gamble is actually resemble adult brains.

Sanjay, how much of this is actual brain development and how much is nature versus nurture? Are we wired one way or are we wired and then we're raised a certain way?

GUPTA: Well, you know, wiring is sort of a loose term, I think, when it comes to the brain, because it can change, certainly, over time and based on your experiences. I think, loosely speaking, when it comes to the nature part, the frontal lobes, that area of the brain that's sort of responsible for our ability to have good judgment, to be less impulsive, those develop more as you get older.

I mean, there are some people say, you know, people shouldn't drive until they're in their 20s for this very reason, and they having teenagers drive might be too early, but they also may become less likely to take risks or a little bit more risk averse, as you say, as a result of those frontal lobe changes, but the nurture part of it, I think, is more interesting in some ways and maybe even a bigger factor, your emotions, your memories of past experiences, and how those all layer in.

Despite how well developed your frontal lobe is, it can start to resemble someone who is younger based on, you know, your impulsivity in the change of there happen (ph).

ROMANS: And there's age and there's also gender. Women and men, they do differently on some of these tests.

HIRSCHHORN: Yes, there's been research over the years that looked at investment profiles of men and women, but I find (INAUDIBLE) working with the traders, very, very few women on Wall Street. And what I find remarkable is that as a coach to top traders, I have to deconstruct male things, ego orientations and layer in self-awareness.

And the funny example I use for client is, before GPS existed, right, if a guy is driving out of a car and gets lost, he will not stop and ask for directions. He takes it personal. He wants to find his way. A woman will say, I would stop for directions. It'd be stupid not to. It's the women who are more reflective when things go wrong. Men want to trade (INAUDIBLE).

ROMANS: So, maybe women should be better traders. There should be more and more women on Wall Street.

HIRSCHHORN: I believe, actually, it's not about gender actually for me. It's about performance. I believe there should be more women than men trading on Wall Street.

ROMANS: Who are the risk seekers, Jason? Is there profile of a risk seeker?

ZWEIG: I don't really think so, Christine. I think, you know, one thing that all investors and consumers, for that matter, should bear in mind is that risk is as much a product of the situation as it is of your disposition. So, you take a person who is not generally considered a risk seeker and you put that person in a risk-seeking situation and their behavior may change completely. Also, perception is very sensitive and changes so rapidly. I mean, think about how people felt after September 11th.

ROMANS: Right.

ZWEIG: Or how people in Japan are probably feeling now. The slightest little risk is enough to really get people disturbed and, you know, you're almost, like -- it's as if you're bruised all over and anything that touches you hurts.

ROMANS: And that's perception and perspective, but that all is happening here in the brain.

Gentlemen, stick with me. We've all heard that money can't buy you happiness, but if you've ever bought something on impulse, you know the high you get. What happens inside your brain at that very moment? The answer might surprise you.

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ROMANS: One of the things we learned at Duke University, our happiness is somewhat set, and while earning or losing money can make it go up and down, it's not a long-lasting effect. Sanjay, we get a temporary high from buying an expensive pair of shoes, for example. It's compared to actually taking a hit if you're a drug addict. Why do we get a rush from spending money?

GUPTA: Well, there's a couple of things that are happening, I think, that are interesting. One is -- and this might be surprising, but it's more in some ways the anticipation of actually buying something. So, the idea that you, as was said in your piece, fantasizing about those nice new shoes that you might have or a new gadget or something like that --

ROMANS: It's the journey and not the destination.

GUPTA: In some way, it is. You know, in fact, even to take that one step further actually getting the shoes or whatever it might be may seem like a little bit of a letdown because the reward system in your brain changes. And there is a reward system in the brain. It's a little bit of a diffuse area, but let me just show you. We're sort of looking at the inside of the brain here, but there's a few structures sort of along the mid-line here.

I'll just say the names. You don't need to remember these, but the nucleus accumbens is a really important part of the brain when it comes to your reward, more neurotransmitter -- you feel good, but as you said, that is a short-term thing. It's hard to think of happiness as chemical. You know, literally neurotransmitters, but it is. And those neurotransmitters start to go away after a while. So, emotion as a chemical is true.

ROMANS: It explains what millions of people already know, that they went out, they bought the thing, and then, there was the let down.

GUPTA: That's right.

ROMANS: The impulse but was not worth the impulse, but you can't stop yourself.

GUPTA: That's right, and we think of that psychologically. Oh, maybe, it wasn't as good a pair of shoes I thought they were going to be or whatever.

ROMANS: It's not the shoes. It's in your head.

GUPTA: Yes. Something truly is happening. Those doping levels may start to drop and the reward system is not as bright any more, and that let downs almost predictable.

ROMANS: Doug, you say from an investing perspective that losses have a bigger impact than gains.

HIRSCHHORN: Right. So, for traders, it's more of process the experience. There was research done a long time ago, not long ago, but did show that the average person losing a dollar felt some degree of bad and you had to make $2.50 to offset that balance. So, what I found with traders is they get a rush actually from the process, but actually losing money is actually more of an adrenaline rush to them than just making money.

And as a result, they push themselves to strive to make more money and offset it. Again, the emotions, I think, by the dollars, and it makes them have a stood (ph) perception about they're doing.

ROMANS: I mean, I think you could see that outside of the trading world. I think that's something that holds true for consumers and others, as well. You're so worried about losing. Also, you're talking about gender earlier. Women -- a lot of study shows that women are much more afraid of losing money than men are.

Jason, we see how the brain works, but there's a psychological effect here, as well, in aspect. I participated in experiment looking at how we value things, whether it's stocks or iPods or shoes. Are we really -- what are we buying into? Are we buying into status, acceptance? What is it?

ZWEIG: I mean, reward is definitely social, Christine, for most of us. I mean, we don't live on the desert island. We don't live in the middle of, you know, the Sahara or something. We live among our peers, and we compare ourselves to other people all the time. Unfortunately, what I think all too many, especially American consumers get caught up in is the notion that if I just had one more X, whatever X is, an iPad or you name it, big car, then I would feel happy.

It's not how much of money you have that really determines your happiness. It's how you spend the money you have. And if you spend money on social experiences, bringing yourself together with friends and family to create new memories that you can look back on later, you really will optimize your happiness with your money.

ROMANS: But don't you think that advertisers in the whole way, the consumer world works, are all geared. They're trying to get us to part with our money, to try to play into those impulses because those impulses are real and they are deep seeded.

ZWEIG: Yes, absolutely. And one of the best things you can do is you can schedule ahead. You can say, I'm going to plan a family reunion for next June or something. And you put it ahead, you mark it on your forward calendar, and that way, you prevent yourself from getting side tracked from creating that positive experience.

ROMANS: Gentleman, this has been a fascinating half hour. Sanjay Gupta, thank you so much.